Official Summary Text
BUSINESS TAX
Except for the f
ees for the exercise of privileges of antique malls, flea markets, craft shows, antique shows, gun shows, auto shows and transient vendors
, present law provides that
the making of sales by engaging in any vocation, occupation, business, or business activit
y is declared to be a privilege upon which a state tax is levied at the rates fixed and provided
for depending on the business
.
Such
tax levied by the state, including any associated interest and penalties,
must
be distributed
in the following way:
An amount equal to $7 per
return
must
be paid to the county clerk with respect to each tax return filed by a taxpayer that is either located within the county or otherwise obtains a license.
Of that amount, $3
must
be earmarked for computer hardware purchases or replacement
.
The amount must be preserved for these purposes and must not revert to the general fund at the end of a budget year if unexpended.
After
such
distribution
,
an amount equal to 5% of the remaining proceeds of the tax
must
be paid to the county clerk
.
After the
above
distributions, 42.62% of the remaining proceeds of the tax
must
be earmarked and allocated specifically and exclusively to the state's general fund
.
After the
above
distributions, an administration fee of 1.125% of the remaining proceeds of the tax
must
be allocated to the
department of revenue
("department"
) to
cover the expenses of administration and collection
.
After
the above
distributions
,
the remaining proceeds
must
be distributed to the county in which the taxpayer has established a physical location, outlet, or other place of business from which the sales are made.
This bill changes the fourth distribution listed above from 1.125% to 0.75%
to the
department
to co
ver the expenses of administration and collection.
Levied
b
y
a
n Incorporated Municipality
Present law requires t
he tax levied by an incorporated municipality
,
including any associated interest and penalties,
to
be distributed as follows:
An amount equal to $7 per return
must
be paid to the appropriate city official with respect to each tax return filed by a taxpayer that is either located within the municipality or otherwise obtains a license
.
After
such
distribution
,
an amount equal to 5% of the remaining proceeds of the tax
must
be paid to the appropriate city official in the case of returns filed
by taxpayers located or otherwise licensed within the municipality
.
After
the above
distributions
,
42.62% of the remaining proceeds of the tax
must
be allocated to the general fund of the state.
Any allocation or distribution of amounts from the general fund for local purposes
must
be deemed first derived from the proceeds directed into the general fund
.
After the
above
distributions
,
an administration fee
of
1.125% of the remaining proceeds of the tax
must
be allocated to the department to cover the expenses of administration and collection
.
After the
above
distributions, the remaining proceeds of the tax collected by the commissioner
must
be distributed to the municipality that levied the tax.
This bill changes the fourth allocation listed above from 1.125% to
0
.75% to the department to cover the expenses of administration and collection.
SHORT-TERM RENTAL UNIT MARKE
TPLACE TAX
Present law requires the
department
to
distribute the taxes collected on a monthly basis to the applicable local governing body in which the short-term rental unit was located and for which the tax was collected.
The department may deduct an
administration fee of 1.125% of the collected tax to cover its expenses of administering the collection and distribution of the tax.
This bill changes the
authorized
administrative deduction
from 1.125% to
0
.75%
.
LOCAL TAX SURCHARGE
A local government
is authorized to levy a surcharge
on the same privileges subject to
certain other
taxes if the underlying local tax on such privileges is being collected at the time a transit improvement program is adopted.
Any surcharge
must
be a separate charge in addi
tion to the local taxes
and subject to certain maximums.
For any surcharge that the department administers and collects,
t
he department
must
remit the proceeds of the surcharge to the local government levying the surcharge, less an administrative fee of 1
.125% to cover expenses of administering the collection and remittance of the surcharge
. This bill lowers the administrative fee from
1.125% to
0
.75%
.
LOCAL OPTION REVENUE TAX
Present law requires t
he department
to
collect
local option revenue tax
concurrently with the collection of the state tax in the same manner as the state tax is collected
.
The department
must
remit the proceeds of the tax to the county, city or town levying the tax, less 1.125%
to
defray the state's expenses in administering,
collecting, and remitting the local sales tax
. This bill reduces the percentage from 1.125% to 0.75%.
Reporting
On or before January 1, 2023, and on or before January 1 of each subsequent year,
present law requires
the department
to
submit a report
to the finance, ways and means committees of the senate and the house of representatives outlining the actual costs incurred by the department for the administration and collection of the local option sales tax.
This bill removes this provision.
COAL S
EVERANCE TAX
Present law provides that a
ll revenues collected in a county in which coal products are severed, less an amount of 1.125% of the tax, which
must
be retained by the department and credited to its current service revenue to cover the expenses
of administration and collection,
must
be remitted by the commissioner to that county in which the coal products were severed for the following specific purposes:
half
of all revenues collected
must
be used for the educational system of the county, and the
remaining
half
must
be used for highway and stream cleaning systems of the county.
This bill reduces the percentage from 1.125% to 0.75%.
EFFECTIVE DATE
This
bill
applies to tax collections received on or after July 1, 2025
.
Current Bill Text
Read the full stored bill text
SENATE BILL 1315
By Johnson
HOUSE BILL 1329
By Lamberth
HB1329
002822
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 4; Title 67, Chapter 6 and Title 67,
Chapter 7, relative to state administration fee on
tax collection.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-4-724(a)(4), is amended by
deleting "one and one hundred twenty-five thousandths percent (1.125%)" and substituting
"seventy-five hundredths percent (0.75%)".
SECTION 2. Tennessee Code Annotated, Section 67-4-724(b)(4), is amended by
deleting "one and one hundred twenty-five thousandths percent (1.125%)" and substituting
"seventy-five hundredths percent (0.75%)".
SECTION 3. Tennessee Code Annotated, Section 67-4-1506, is amended by deleting
"one and one hundred twenty-five thousandths percent (1.125%)" and substituting "seventy-five
hundredths percent (0.75%)".
SECTION 4. Tennessee Code Annotated, Section 67-4-3203(d)(2), is amended by
deleting "one and one hundred twenty-five thousandths percent (1.125%)" and substituting
"seventy-five hundredths percent (0.75%)".
SECTION 5. Tennessee Code Annotated, Section 67-6-710(b), is amended by deleting
subdivision (2) and substituting instead:
(2) The department shall remit the proceeds of the tax to the county, city, or
town levying the tax, less seventy-five hundredths percent (0.75%) of the tax to cover its
expenses of administering the collection and distribution of the tax.
- 2 - 002822
SECTION 6. Tennessee Code Annotated, Section 67-6-710, is amended by deleting
subsection (h) in its entirety.
SECTION 7. Tennessee Code Annotated, Section 67-7-110(b), is amended by deleting
"one and one hundred twenty-five thousandths percent (1.125%)" and substituting "seventy-five
hundredths percent (0.75%)".
SECTION 8. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to tax collections received on or after that date.